FORTUNE -- With Apple's (AAPL) share price off sharply from its September highs and seemingly stuck in the mid-$500 doldrums, sell-side analysts with considerably higher price targets (mean: $764) have been busy trying to calm their anxious clients. Excerpts from this week's notes:
RBC Capital's Amit Daryanani: Addressing Top Five Concerns. "In recent weeks we have discussed and heard myriad of issues that have lead to AAPL's under-performance (-23% since Sep-19 vs. S&P -6%). We believe there are five consistent concerns: 1) What's the next product launch, 2) Long-term gross-margin declines, 3) Supply-chain constraints, 4) 2013 Tax Increases and 5) Management Changes. We believe fundamentals at AAPL remain strong and the stock should outperform over the next 6-12 months driven by A) Strong Dec-qtr results given impressive product line-up for holidays, B) Gross-margins begin to improve in Dec-qtr and beyond, C) Potential ramp with China Mobile and iTV launch in 2013. Sticking with $750 price target.
Barclays' Ben Reitzes: What's Ailing Apple? "We seem to be in the midst of one of the most controversial periods in Apple's stock in the last 10 years with what appears to be a sudden wave of pessimism overtaking the largest and most owned stock in the world. There is no shortage of publicity that since September 21st, shares of Apple have fallen over 20% vs. a drop in the NASDAQ of 9% over the same time frame. The first reason simply seems to be a loss of momentum with two sub-consensus EPS reports in a row – and then December quarter EPS guidance well below consensus. Technical levels and tax-selling seem to be playing roles as well. From a fundamental standpoint, we continue to view Apple as one of the clearest beneficiaries of the shift in computing toward mobile devices with the iPad and the iPhone. From a valuation standpoint, the company trades around 10x 2013 EPS (8x excluding cash), which puts it cheaper than the likes of IBM at around 11x. In this report, we attempt to identify the top fundamental concerns for Apple right now and evaluate their merits." Price target unchanged at $800.
CLSA's Avi Silver: Poised To Rebound. "We believe Apple's fundamentals are intact and supply chain checks are supportive of our F1Q 49m iPhone unit estimate (including 4/4S). Apple's poor stock performance of late raises several key questions which we address in this report. We believe the selloff creates a buying opportunity and maintain our estimates and $770 price target. [See Apple shares 'poised to rebound' for more detail.]
Baird's William Power: Sentiment Negative, but Fundamental Outlook Still Solid. "Based on recent investor meetings, there are a litany of Apple concerns, all of which we discuss in more detail in the research note.
Pace of innovation slowing. Perhaps, though multiple opportunities still ahead.
Recent software shortfalls. Yes, though Apple's software/hardware integration remains tops overall.
Samsung competition. Ditto the above answer.
Gross margins unsustainable. Long-term questions, though iPhone 4 could be a positive proxy for margin improvement in C2013.
Current supply shortages. Checks suggest improvement, though not perfect.
Product cycle visibility. iPad cycle change?
Replacement cycle challenges. Law of large numbers puts onus on market segmentation and new products/markets.
iPhone developing market strategy, or lack thereof. Huge opportunity, though don't expect near-term solution.
Identity crisis without Jobs. A well-known risk.
Macro impacts. Europe a concern, though U.S. and Asia demand look strong."
Maintaining $750 target price.
Piper Jaffray's Gene Munster: Comfortable With FY13 Margin Assumptions. "The good news is this analysis suggests while margins will dip in December (in line with Street models) margins should return to historical levels inline with current Street estimates. The bad news is that it's unlikely we return to the reported 43.9% level in FY12 given the potential for a Samsung processor price increase, which would cause a 1-2 percentage point hit to margins." Reiterating $900 price target.
Avondale Partners' John Bright: Innovation Without Jobs? "We expect AAPL's cash cows, the iPhone and iPad (~70% rev, ~75% op. income), will generate double digit earnings growth (~15-20% CAGR) over the next three years, driven by rapid growth in the smartphone/tablet markets and by modest market share gains. However, we expect decelerating earnings growth (~59% FY12, ~19% FY15) and increasing gross margin pressure (~44% FY12, ~40% FY15) driven by incremental market penetration and aggressive competition. Nevertheless, we acknowledge AAPL could reaccelerate earnings growth and build a competitive barrier through product innovation, for example with a TV product, or through increased stickiness of its existing products. Yet given AAPL's decelerating, albeit attractive, LT earnings growth, expected gross margin pressure, the speculative nature of any new product innovation, and to be seen stickiness of iCloud, we believe the probability of increased competition outweighs the probability of innovation without Jobs. Initiating coverage with $600 price target.
More as they come in.
As Apple's share price passes $665, are some analysts having second thoughts?
FORTUNE -- After Apple (AAPL)'s third fiscal quarter earnings came in below Wall Street's expectations, several analysts -- including Goldman Sach's Bill Shope, ISI's Brian Marshall and BMO's Keith Bachman -- lowered their 12-month price targets (to $790, $710 and $680, respectively).
At least their targets are still higher than Apple's current price. After setting new record highs two sessions MOREPhilip Elmer-DeWitt - Aug 22, 2012 7:30 AM ET
One fund manager says his biggest fear is that he's missed his chance to fully buy in
FORTUNE -- The last time Apple (AAPL) closed above $633 was April 9, 2012. The next day it began into a ragged six-week decline that by May 18 (the sharp dip in the middle of the chart at right) had knocked $115 off the share price and more than $100 billion off the company's MOREPhilip Elmer-DeWitt - Aug 17, 2012 3:51 AM ET
Midway through 2012, the analysts' calls range from a low of $270 to a high of $1,200
FORTUNE -- Robert Paul Leitao, who runs the Braeburn Group of independent Apple (AAPL) analysts, published the 12-month price targets of 15 Braeburn members on his Posts at Eventide website Saturday. They range from a low of $700 to a high of $1,100, for an average of $890 a share.
How does that compare with MOREPhilip Elmer-DeWitt - Jun 17, 2012 8:22 AM ET
There seems to be a growing disconnect in Wall Street's valuations
FORTUNE -- I know that comparisons, as Shakespeare's Dogberry put it, are supposed to be odorous, but this one is beginning to stink.
How can Apple (AAPL), with $110 billion in the bank, annual sales of $140 billion and earnings that nearly double every year, be valued so much lower than Amazon (AMZN), which has $6 billion in the bank, sales MOREPhilip Elmer-DeWitt - May 8, 2012 7:10 AM ET
The only thing that seems to matter to Wall Street is how much cash it has in the bank
FORTUNE -- It's been a year since Asymco's Horace Dediu -- mystified by the apparent decoupling of Apple's (AAPL) share price from its earnings growth -- first spotted the correlation between the company's valuation and its holdings in cash and marketable securities.
"As far as the market is concerned," he wrote at the MOREPhilip Elmer-DeWitt - May 7, 2012 8:04 AM ET
Having missed the boat last quarter, Wall Street is taking a second look at China
FORTUNE -- I can count on one hand the number of Wall Street analysts whose estimates of Apple's (AAPL) iPhone sales last quarter came within 2 million units of the correct answer (35.1 million).
Most of them were so distracted by the predictable fall-off in Verizon (VZ) and AT&T (T) activations after Christmas that they missed the significance of MOREPhilip Elmer-DeWitt - Apr 30, 2012 11:00 AM ET
Wall Street expects record results. The independent analysts are calling for a blowout
FORTUNE -- Savvy Apple (AAPL) investors know that the company's share price often gets dragged down in advance of its quarterly earnings reports -- only to spring back even higher when Apple delivers its usual earnings surprises. (See Cocking the Apple slingshot.)
But the stock's collapse over the past two weeks has even veteran traders scratching their heads. It MOREPhilip Elmer-DeWitt - Apr 21, 2012 11:50 AM ET
The estimates range from 26 to 44 million. The best analysts' consensus: 35 million.
The most important metric for Apple (AAPL) in the quarter that ended two weeks ago -- likely to account for more than half of the company's revenue for fiscal Q2 2012 -- is the number of iPhones it sold from Jan. 1 to Mar. 31.
We've polled 48 analysts -- evenly divided between professional and independent -- and the indies, MOREPhilip Elmer-DeWitt - Apr 16, 2012 5:00 AM ET
How exactly did Brian White come up with that number?
When last we heard from Ticonderoga's Brian White, a few hours after Apple (AAPL) reported its Q1 2012 earnings, he was reiterating the 12-month price target he had set the previous July: "Apple crushes even the most optimistic expectations," he wrote. "$666 here we come."
Two days later, Ticonderoga closed up shop.
On Monday White resurfaced at a new firm, Topeka Capital, with a MOREPhilip Elmer-DeWitt - Apr 2, 2012 11:33 AM ET
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